The Supply Chain Brain article, "How to Drive Diversity Into Supply Chains," was written by Russell Reynolds Associates Consultant
Markus Hofer on how supply chain and logistics businesses can drive diversity within their organizations. The article is excerpted below.
The world of business has finally figured out what seems intuitive: diversity matters. Motivated by ethical concerns, as well as the conviction that a more demographically representative company is more effective, firms are actively trying to address long-held gender and racial imbalances.
While this force is observable in sectors such as high tech, where startups increasingly tout C-suite positions like Chief Diversity Officer, it also extends to more established corporate players. In September of 2020, PwC, one of the “big four” auditing and accounting firms, published its first Diversity and Inclusion Transparency Report, which outlines its strategy to reduce homogeneity in its workforce, as well as results toward that end to date.
The supply chain and logistics sector isn’t immune to these trends. Like the worlds of technology and finance, it has a well-deserved reputation for being somewhat of a “boy’s club,” similar to the likes of the oil and gas industry. The most recent industry demographics data from Gartner underlines that point. In 2019, women accounted for just 39% of the supply-chain workforce, despite representing more than 50% of the professional workforce in developed markets. The divide only gets wider at the leadership level.
Leadership positions were largely concentrated in the hands of men, who occupied 89% of all top roles. This figure represents a drop from 2017, when women held 15% of CSCO, EVP, SVP and CPO positions.
Gender diversity is just one piece of a multifaceted puzzle that supply-chain firms must solve. It cuts along several strata, including race, sexuality, ability, skillset, experience, and age, each with its own challenges and foibles. The one unifying factor is the urgency in which they must be solved.
Take age, for example. In 2016, the U.K. Commission for Employment and Skills (UKCES) found that just 9% of those working in the supply chain and logistics sector were under 25. Nearly half — 45% — were over 45. The problem is compounded by the fact that many of the skills learned within the industry are non-transferable to other sectors. Like the Hotel California, it’s easy to check in, but almost impossible to leave. This limited mobility reduces the healthy turnover within a company that seeks innovation and new ideas.
Overreliance on an aging workforce makes recruitment more challenging. Worse, it puts firms at a competitive disadvantage, as they fail to capture the benefits of a digital-native labor pool.
It’s understandable why some supply-chain sectors might wish to rely on older, more experienced workers. Younger staffers require training, whereas those entering a company with two decades of work experience under their belts are more likely to hit the ground running. But younger workers are also more likely to enter the workforce with skills that simply didn’t exist 10 or 20 years ago, particularly when it comes to automation and information technology.
It’s those skills that will carry the supply-chain sector forward as it grapples with the shifting sands of time. Robotics — and soon, driverless vehicles — will allow firms to operate at greater speed and scale than ever before. Businesses won’t just compete on cost and quality, but also innovation. If you stand still, you’ll perish.
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